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A Project report on

Awareness of Mutual Funds Among


LIFE INSURANCE Agents

A report submitted to
WORLD CLASS SKILL CENTRE, DELHI
as a partial fulfillment of Full time
Submitted by
SANJEEV CHOUDHARY
UNDER THE GUIDANCE OF
Mr. CHAHAT MIYAN KHAN
BRANCH MANAGER
NJ INDIA INVEST

TABLE OF CONTENTS
About the company
Executive Summary
Mutual Fund Industry analysis
Mutual fund
History of Mutual fund
Market potential for Mutual Fund
Research design and methods
Data analysis and presentation
SWOT analysis of MF
Conclusion and recommendation

Bibliography
Questionnaire
ACKNOWLEDGEMENT
It gives me immense pleasure to acknowledge the names, which had helped
me in successful completion of this project. First of all I would take the
opportunity to thank the Almighty God for granting me all the strength I
needed.

I am also thankful to Mr. CHAHAT MIYAN KHAN (Branch Manager),


Mr. ANURAG TRIPATHI(Unit Manager) NJ INDIA INVEST Pvt. Ltd for
their valuable suggestions, which benefited me a lot while developing the
project on AWARENESS OF MUTUAL FUND AMONG LIFE
INSURANCE AGENTS.
This research would not have been completed without friendly efforts of the
all the concerned authorities. Also this project enables me to have the know-
how of the effectiveness & working of the team spirit. Its web like structure
helps me to have added potential in myself to adjust easily to the tense &
result oriented environment of the organization.

SANJEEV CHOUDHARY
STUDENT DECLARATION
I, SANJEEV CHOUDHARY student of BABU SHIVNATH AGARWAL COLLEGE OF
ENGINEERING & TECHNOLOGY hereby declares that the project report titled A STUDY ON
AWARENESS OF MUTUAL FUNDS AMONG LIFE INSURANCE AGENTSis completed
and submitted under the valuable guidance of my Company Guide Mr. CHAHAT MIYAN
KHAN , is my own work, to the best of my knowledge and belief. It contains no material
previously published or written by another person nor material which to a substantial extent has
been accepted for the award of any other degree or diploma of any other institute, except where
due acknowledge has been made in the text.

Place : MATHURA SANJEEV CHOUDHARY

Date :

ABOUT THE COMPANY


NJ India Invest Pvt. Ltd. is one of the leading advisors and distributors of
financial products and services in India. Established in year 1994, NJ has
over a decade of rich exposure in financial investments space and portfolio
advisory services. From a humble beginning, NJ, over the years has evolved
out to be a professionally managed, quality conscious and customer focused
financial / investment advisory & distribution firm.
They have headquarter in Surat, India, and have more than INR 30,000
Crores plus of mutual fund assets under advice, with a wide presence at over
104 locations in 21 states in India. The numbers are reflections of the trust,
commitment and value that NJ shares with 11 Lac plus customer base with
over 25000+ Advisors.
NJ prides in being a professionally managed, quality focused and customer
centric organization. The strength of NJ lies in the strong domain knowledge
in investment consultancy and the delivery of sustainable value to clients
with support from cutting-edge technology platform, developed in-house by
NJ.
NJ, believes in..
Having single window, multiple solutions that are integrated for
simplicity and sapience
Making innovations, accessions, value-additions, a constant process
Providing customers with solutions for tomorrow which will keep
them above the curve, today
Technology has traditionally been NJ's key strength. Our offering on the
technological front is unmatched, vibrant, and comprehensive in nature. Our
focus & commitment on technology can be gauged from the fact that we
have set-up distinct entity with a very strong, talented work-force for the
sole purpose of providing the best to NJ in terms of technology and support.
Finlogic Technologies (India) Pvt. Ltd. does all the development & support
work in-house on a continuous basis. It has successfully developed &
implemented a powerful support system for the mutual fund distribution
business at NJ with a provision for integrating the same with other
investment products as well as the financial accounting system. Today
Finlogic Technologies has more than 100 employees for its IT development

Vision:
Creating Wealth Transforming Lives
Total Customer Satisfaction
Commitment to Excellence
Determination to Succeed with strict adherence to compliance
Successful Wealth Creation of our Customers
Mission:
We work towards building trusted relationship with our stakeholders, for
inclusive growth through constant process of innovation, time bound
implementation & execution of ideas and technological developments. We
stretch our means and go overboard to make sure that our clients'
aspirations, dreams and expectations are met with, through high service
standards.

Our Values
While we constantly look for new ideas and changes that cause positive
difference to our clients, we remain true to the values upon which NJ India
Invest was found.

People & Culture:


For any service oriented organization like NJ, its employees are perhaps the
best asset. People at NJ serve clients with vibrant energy and enthusiasm.
'Serving with Smile' is the motto adopted by people at NJ. People here are
well inclined towards their roles & responsibilities and are given complete
freedom to do justice with their roles. We believe in continuous
enhancement and growth of our human capital through on going process of
training & development. At NJ, we encourage innovative ideas and
suggestions from employees and value their contributions. Team NJ works
towards common goal of 'Client Esteem' and in process of deriving this goal
people at NJ keep learning, evolving and developing every day.

Promoters
Mr. Neeraj Choksi & Mr. Jignesh Desai (R) are two first generation
entrepreneurs who began the journey of 'NJ' in 1994. The promoters of the
NJ Group were friends since their college years and the bond between Mr.
Neeraj & Mr. Jignesh has been instrumental in the success of NJ. Discussing
upon important things before taking any decision, is a habit that they have
followed ever since they shared their hostel room in Vidhyanagar, where Mr.
Neeraj was studying his management courses and Mr. Jignesh was into
engineering. They both have a complementary style of functioning that
augurs perfectly well for the business.
Driven by their passion for financial well-being of customers & the mission
for transforming lives, the promoters have successfully put NJ on the
forefront of innovation & growth. With a humble beginning from home, the
promoters have successfully shaped the group's forays into many diversified
businesses.
Both believe that 'Trust' has played a very important role in NJ's journey, and
in every step that they have taken. The words of the promoters aptly
describes this journey of NJ 'Built on Trust'.
Management
The management at NJ brings together a team of people with wide
experience and knowledge in the financial services domain. The
management provides direction and guidance to the whole organization. It
has strong visions for NJ as a globally respected company providing
comprehensive services in financial sector.
The Customer First philosophy is deeply ingrained in the management at
NJ. The aim of the management is to bring the best to the customers in terms
of Range of products and services offered .
Quality Customer Service
All the key members of the organization put in great focus on the processes
& systems under diverse functions of business. The management also
focuses on utilizing technology as the key enabler for all the activities and to
leverage technology for enhancing overall customer experience.
High-level of expertise:
Being a growing organization, we strive to constantly evolve by providing
the highest level of expertise to our client, continuously,
Integrity & Transparency:
We believe in doing business with a high standard of honesty & integrity.
Creating long term 'trustworthy' relationships with our clients is at the core
of our business model. We strive to maintain the highest level of
transparency and are open to discussions when serving our advisors and
investors.
Performance:
Our drive for performance is distinguished by consistent and meaningful
measurement. At NJ, we are passionate about our customer's wealth
creation. The entire NJ team exudes confidence and spreads positive vibes
around. Team NJ is well inclined towards its roles & responsibilities and is
eager to learn to serve the customer better. We believe in continuous
enhancement and growth of our human capital and people at NJ start each
day afresh with an eagerness to learn and a passion to win.
Strong relationships
Strong relationships grounded in trust and mutual respect over the long-term
allow us to successfully serve clients through the various phases of their
lives.
Comprehensive, accurate communications using leading-edge technologies
We employ new technologies to set industry standards in reporting and client
communications.
Professional ethics
Our top priority is meeting the needs of our clients, and we unequivocally
take full responsibility for the work we do. At NJ, we follow a strong
process oriented approach in everything we do. We are firm believers of
Follow the process, Results will Come mantra. We have detailed processes
related to sales, administration and client servicing, which help us evaluate
our performance better and improve upon the shortcomings identified in the
system.

Striving Excellence in Servicing:


There is no substitute to quality service and advice. We accept this fact at NJ
through our commitment to quality client servicing. We work on the latest
technologies, solutions and products for our clients to ensure they stay ahead
of the competition and make their business run in quick, efficient and the
best way.
Philosophy
At NJ, our Service and Investing philosophy inspire and shape the thoughts,
beliefs, attitude, actions and decisions of our employees. Our philosophy is
the spirit which drives our body called NJ.
Service Philosophy:
Our primary measure of success is customer satisfaction. We are committed
to provide our customers with continuous, long-term improvements and
value-additions, to meet the needs in an exceptional way. In our efforts to
consistently deliver the best service possible to our customers, all employees
of NJ make every effort to:
Think of the customer first, take responsibility, and make prompt
service to the customer a priority.
Deliver upon the commitments & promises made, on time.
Anticipate, visualize, understand, meet and exceed our customer's
needs.
Bring energy, passion & excellence in everything we do.
Be honest and ethical, in action & attitude, and keep the customers
interest supreme.
Strengthen customer relationships by providing service in a thoughtful
& proactive manner and meet the expectations, effectively.
Investing Philosophy:
We aim to provide need-based solutions for long-term wealth creation We
aim to provide all the customers of NJ, directly or indirectly, with true,
unbiased, need-based solutions and advice that best meet their stated & un-
stated needs. In our efforts to provide quality financial & investment advice,
we believe that .
Clients want need-based solutions, which fits them.
Long-term wealth creation is simple and straight.

Asset-Allocation is the ideal & the best way for long-term wealth
creation.
Educating and disclosing all the important facets, which the customer
needs to be aware of, is important.
The solutions must be unbiased, feasible, practical, executable,
measurable and flexible.
Constant monitoring and proper after-sales service is critical to
complete the on-going process.

At NJ, our aim is to earn the trust and respect of the employees, customers,
partners, regulators, industry members and the community at large, by
following our service and investing philosophy with commitment.

Corporate Governance
NJ realizes the importance of corporate governance and seeks to implement
the best practices for the same. We strongly believe that we have an
obligation or duty as corporate entities to all our stakeholders; from
employees, customers and vendors to business partners, authorities, and
society at large. We aim to strike the right balance between minimizing
business risks while attempting to maximize business growth.
Corporate Governance at NJ is based on the following main principles:
Timely and strict compliance to all established rules, regulations and
guidelines
Building sound system of risk management and internal control.
Timely and balanced disclosure and communication of all material
information to all stakeholders.
Transparency and accountability in all practices
Fair and equitable treatment of all its stakeholders including
employees, associates, customers & community

Consumer Grievances:
The existing customers may approach NJ Customer Care Help Desk for any
queries / clarifications or issues that they may face in NJ. Also you may
email us for any queries or grievances.

Achievements
Some of the awards & recognitions that we have received in the past
Year 2000:
For Outstanding Performance presented by Chairman, Prudential Plc. at
London
Year 2002:
For Outstanding Performance presented by Group Chief Executive,
Prudential Plc. at London
Year 2003:
For Outstanding Performance presented by Group Chief Executive,
Prudential Plc. at London
Year 2004:
Among Most Valued Business Associates presented by HDFC Standard Life
at Edinburgh, Scotland
Year 2004:
For Outstanding Performance by Deputy CEO, Prudential Singapore at
Malaysia
Year 2006:
Award for mobilising the Highest Number of SIPs at National Level by
Fidelity Mutual Fund Plc at Mumbai
Year 2006:
Award Vietnam
Product basket
Investment Products: Domestic mutual funds (all AMCs), Fixed Deposits of
companies, PMS products (Third party & NJ), Government/ RBI/
Infrastructure bonds
Residential & commercial properties
Partner Services
Dedicated Relationship Manager
Marketing & Sales support
Research support
Training & Education support
Dedicated Customer Care / Query management support

Technological support, including online business / 'Partners Desk'


with CRM, Financial Planning & Employee Management modules

Customer Services:
Online family "Wealth / Client Desk" enabling single portfolio view of
'entire' wealth portfolio Trading & Demat Account with online transacting &
call-&-trade service in mutual funds.

NJ Fundz Network
NJ Fundz Network has been playing a pioneering role in India in providing
independent advisors / advisory firms with integrated, comprehensive and
practical business solutions for ensuring continuous growth & continuity of
business. It provides the financial advisors and the institutions that serve
them with insights, strategies and tools to help them significantly grow their
businesses.
How do they do it?
Thats because they understand how financial & wealth management
businesses work and what is needed to manage, monitor and grow the
practice.

With the 360 Advisory platform, NJ has managed to successfully transform


the business of many advisory / distribution houses, bringing them on equal
footing or even better than the toughest competitors in the industry in the
concerned domain. With a vast experience & strong delivery mechanism,
they at NJ Fundz Network, help & ensure transformation and the
exploitation of the opportunities available.
Comprehensive Financial Planning
We all have many responsibilities and goals in our lives. We have dreams
an aspirations for a better future. But quite often we are not sure as to
how we will fulfill these goals and aspirations. Life changes over time.
We may never be sure what today holds for us tomorrow. What if
something goes wrong? How do we make sure that we get what we wish?
A comprehensive Financial Plan is what you need. At NJ Wealth Advisors we
offer you with Comprehensive Financial Planning solutions which would
involve

A detailed study of your goals.


Preparation of a comprehensive Financial Plan.
Monitoring of the Financial Plan on an on-going basis.

First in the Indian Mutual Fund Industry to offer a Complete Business


Platform to Advisors
Managing wealth is not easy, especially with the ever growing needs and
products. In this fast paced world, there is a need for simplicity and
consolidation. The need is to stay ahead, stay informed and stay in control.

NJ Client Desk offers a comprehensive, flexible account which consolidates


all portfolio information of a client in a single window in a simple lucid
manner. It keeps client informed of their finances and puts them in control to
take smart investment decisions.

EXECUTIVE SUMMARY
The aim of this project is to understand the current capabilities of the Test
and Test Automation services, understand their current market strategy and
to suggest and recommend a better market strategy for implementation so
that the Test and Test Automation group gets more business from the current
domains / industry segments with the current capabilities.
Also how they can expand their current market share across the world wide
test automation services market.
The new market strategy hence would be segmented in three parts. The first
set contains those strategies which should be implemented within the span of
1month or so. The second set of strategy which should be implemented
within 6 months duration of time.
And the last set of strategies which are long term strategies which are aimed
to grow the market share of the test and test automation services and should
be implemented across the span of a year.
The method used to understand the current capabilities of the test services
was through the overview of the various projects executed by the test team
across various domains/verticals.
Further to understand the issues in the current promotional activities of the
test services was through interaction with various people involved in the
testing services like project managers, Business development
executives/senior executives ,sales managers and various test team members.

OBJECTIVE OF STUDY
The objective of the research is to study the awareness of mutual
funds among life insurance agents.
To get knowledge about Mutual Funds.
To know the mutual funds performance level in the present market.

MUTUAL FUND INDUSTRY ANALYSIS


Investment is a commitment of funds in real assets or financial assets.
Investment involves risk and gain. In the present dynamic global
environment, exploring investment avenues are of great relevance. The
success of an investment activity depends on the knowledge and ability of
investors to invest, the right amount, in the right type of investment, at the
right time .
The knowledge of financial investment and the art of its management are the
basic requirements for a successful investor. The pre-requisite for a
successful investment also lies in its liquidity, apart from risk and return on
investment. Liquidity through easy marketability of investments demands
the existence of a well-organized Government regulated financial system.
Financial services sector is the nucleus of the growth model designed for the
economic development of a country. Over the years, the financial services in
India have undergone revolutionary changes and had become more
sophisticated, in response to the varied needs of the economy.
The process of financial sector reforms, economic liberalization and
globalization of Indian Capital Market had generated and augmented the
interest of the investors in equity. But, due to inadequate knowledge of the
capital market and lack of professional expertise, the common investors are
still hesitant to invest their hard earned money in the corporate securities.
The advent of mutual funds has helped in garnering the investible funds of
this category of investors in a significant way. As professional experts
manage mutual funds, investment in them relieves investors from the
emotional stress involved in buying and selling of securities.
The Indian capital market having a long history spanning over a century had
passed through the most radical phase. The Indian Capital Market witnessed
unprecedented developments and innovations during the eighties and
nineties. One such development was the increased role the mutual fund
industry played in financial intermediation. Mutual fund, as an institutional
device, pools investors funds for investment in the capital market under the
direction of an investment manager. Mutual funds bridge the gap between
the supply and demand for funds in the financial market.
In India, the need for the establishment of mutual funds was felt in 1931 and
the concept of mutual fund was coined in 1964, by the far-sighted vision of
Sri T.T. Krishnamachari, the then finance minister. Taking into consideration
the recommendations of the Central Banking Enquiry Committee and Shroff
Committee, the Central Government established Unit Trust of India in 1964
through an Act of Parliament, to operate as a financial institution as well as
an investment trust by way of launching UTI Unit Scheme 64.
In India, mutual funds as vehicles of mobilization and channels of funds
towards the securities market, had shown improvement in total net assets
from Rs.25 crores, by the end of 1964-65 to Rs.47,734 crores as on March
31, 1993, and touched Rs.2,31,862 crores as on March 31, 2006 The
industry is holding total net assets worth Rs.3,26,338 crores as on March
31, 2012 through 687 schemes. Mutual funds are set to bag a huge chunk of
nearly Rs.3,05,000 crores of cash reserves from Governments new pension
fund and public sector companies. The mutual fund industry in India had
grown several folds in terms of number of schemes, funds raised and
investor base over the years.
India has become the worlds fourth largest economy besides U.S.A., China,
and Japan. Although the Indian capital market witnessed some significant
changes during the eighties, both the primary and the secondary segments
continued to suffer from some serious deficiencies. Many unhealthy
practices prevailed in the primary market to attract retail investors. High
pricing of new issues, difficulties in analyzing the prospects of a company,
under pricing of shares in the market after listing have discouraged and
aroused hesitation among many investors to enter into the stock market.
The secondary market had
become highly volatile and technical for small investors. The domestic
mutual fund industry has grown by 50 percent particularly through
Systematic Investment Plan (SIP) from retail participants. But, there is still
a long way to go as only five percent of the households are investing in
mutual fund schemes. It is estimated that, the Gross Domestic Savings for
2007-08 to 2013-14 will range from 33.4 percent to 36.7 percent, under the
growth scenarios of seven to nine percent respectively, against 27.1 percent
in 2004-05. Household sectors financial savings for 2007-08 to 2013-14 is
expected to be in the range of 28.1 percent to 29.4 percent, with household
financial and physical savings projected in the range of 11.3 percent to 11.4
percent and 12.9 percent to 13 percent respectively.
The household savings rate is increasing and is expected to accelerate with
the reinforcement of being demographic dynamics, financial sector
liberalization and increasing human development index. As the household
sectors share in financial assets is expected to go much higher in the
countrys savings, it is of utmost importance to show a right path to
individual investors. With an emphasis on increase in domestic savings and
improvement in deployment of investible funds into the market, the need
and scope for mutual fund operations have increased and is expected to
increase tremendously in future. Mutual funds seek to serve those
individuals, who have the inclination to invest but lack the background,
expertise and sufficient resources to diversify their investment among
various sectors.
Mutual fund entered the arena of this service sector in an admirable manner.
The IMFI is one among the top 15 nations in terms of assets under
management, which has crossed USD 100 billion. As a globally significant
player the IMFI is attracting a bigger chunk of household investments and is
expected to witness five to six times growth in the next seven to eight years.
It is expected that the industrys AUM may grow to USD 500-600 billion by
2015 as more global players are planning and ready to set up asset
management businesses in India
Among the mutual funds, it is expected that debt oriented schemes will
continue to dominate the mutual fund industry satisfying the needs of yield,
security and liquidity fairly well besides being attractive from the tax point
of view. While equity oriented schemes will gain more significance in
future, their popularity will depend on the conditions of the stock market
and the kind of tax relief accorded to them. Hence, it is of utmost
importance to study the performance of growth schemes of mutual fund
industry, which is a near substitute for direct investment in shares.
It was not a particularly easy year for the mutual fund industry. Regulatory
changes at a frequency that was hard to keep pace with, fund manager
churns, big ticket takeover and the constant uncertainty on the interest rate
front that kept debt managers guessing, all caused plenty of anxious
moments for the investor community as well. Yet, focus on performance
helped funds garner market-beating returns, thanks to the bounce back in the
equity market and the price rally in some debt instruments in 2012.
With an average return of 28 per cent in the equity category and a good 9.6
per cent in debt, year to date in 2012 (up to December 25), mutual funds
delivered well. The Sensex returned 24.5 per cent over this period while the
CRISIL Composite Bond index rallied 9 per cent. While the equity
performance was a complete turnaround from 2011, when funds fell an
average 23 per cent, the debt category saw a marginal improvement over last
year (average return of 8.9 per cent in 2011), thanks to a stronger rally in gilt
this year.
MUTUAL FUND
A Mutual Fund is a trust that pools the savings of a number of investors
who
share a common financial goal. The money thus collected is invested by the
fund manager in different types of securities depending upon the objective of
the scheme.

These could range from shares to debentures to money market instruments.


The income earned through these investments and the capital appreciation
realized by the scheme are shared by its unit holders in proportion to the
number of units owned by them (pro rata).
Thus a Mutual Fund is the most suitable investment for the common man as
it offers an opportunity to invest in a diversified, professionally managed
portfolio at a relatively low cost. Anybody with an investible surplus of as
little as a few thousand rupees can invest in Mutual Funds. Each Mutual
Fund scheme has a defined investment objective and strategy.
Mutual fund is the ideal investment vehicle for todays complex and modern
financial scenario. Markets for equity shares, bonds and other fixed income
instruments, real estate, derivatives and other assets have become mature
and information driven. Price changes in these assets are driven by global
events occurring in faraway places.
A typical individual is unlikely to have the knowledge, skills, inclination and
time to keep track of events, understand their implications and act speedily.
An individual also finds it difficult to keep track of ownership of his assets,
investments, brokerage dues and bank transactions etc. Draft offer document
is to be prepared at the time of launching the fund. Typically, it pre specifies
the investment objectives of the fund, the risk associated, the costs involved
in the process and the broad rules for entry into and exit from the fund
and other areas of operation. In India, as in most countries, these sponsors
need approval from a regulator, SEBI (Securities exchange Board of India)
in our case.

SEBI looks at track records of the sponsor and its financial strength in
granting approval to the fund for commencing operations.
A sponsor then hires an asset management company to invest the funds
according to the investment objective. It also hires another entity to be the
custodian of the assets of the fund and perhaps a third one to handle registry
work for the unit holders (subscribers) of the fund.
In the Indian context, the sponsors promote the Asset Management
Company
also, in which it holds a majority stake. In many cases a sponsor can hold a
100% stake in the Asset Management Company (AMC). E.g. Birla Global
Finance is the sponsor of the Birla Sun Life Asset Management Company
Ltd., which has floated different mutual funds schemes and also acts as an
asset manager for the funds collected under the schemes.
ORGANIZATION OF A MUTUAL FUND
A Mutual Fund is set up in the form of trust, which has sponsor, trustees,
asset management company (AMC), and custodian. The trust is established
by
sponsor or more than one sponsor who is like a promoter of company. The
trustee of mutual fund holds its property for the benefit of unit holders. Asset
Management Company (AMC) approved by SEBI manages the funds by
making investments in various types of securities. Custodian, who registered
with SEBI, holds the securities of the fund in its custody. The trustees are
vested with the general power of superintendence and direction over AMC.
They monitor the performance and compliance of SEBI regulations by
mutual fund.
SEBI regulations required that at least two thirds of the directors of trustee
company or board of trustees must be independent i.e. they should not be
associated with sponsors. Also, 50% of the directors of the AMC must be
independent. All mutual funds are required to be registered with SEBI before
they launch their schemes.
MUTUAL FUND STRUCTURE
The structure of mutual funds in India is governed by the SEBI
Regulations, 1996. These regulations make it mandatory for mutual funds
to have a 3-tier structure of Sponsors- Trustee-AMC (Asset Management
Company). The Sponsor is the promoter of mutual fund, and
appoints the Trustee. The Trustees are responsible to the investors in the
mutual funds, and appoint the AMC for managing the investment portfolio.
The AMC is the business face of the mutual funds, as it manages all the
affairs of mutual funds. The mutual funds and AMC have to be registered by
the SEBI.
Sponsor
A sponsor is a body corporate who establishes a mutual fund. It may be one
person acting alone or together with another body corporate. Sponsor must
contribute at least 40% of the net worth of the Investment Managed and
meet the eligibility criteria prescribed under the Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not
responsible or liable for any loss or shortfall resulting from the operation of
the Schemes beyond the initial contribution made by it towards setting up of
the Mutual Fund
Board of Trustee:
Mutual fund requires to have an independent board of Trustee, where two
third of the trustees should be independent person who are not associated
with the sponsor in any manner. The board of trustees of the trustee
company holds the property of the mutual fund in trust for the benefit of the
unit holders. The board of trustees is responsible for protecting the unit
holders interest.
Asset Management Company (AMC)
The role of asset Management Company is highly significant in the mutual
fund operation. The AMC is appointed by the Trustee. They are the fund
managers i.e. they invest the investors money in various securities ( equity,
debt and money market instruments) after proper research of market
conditions and the financial performance of individual companies
and specific securities in the efforts to meet or beat average
market return and analysis. The AMC is required to be approved by
the Securities and Exchange Board of India (SEBI) to act as an asset
management company of the Mutual Fund. At least 50% of the directors of
the AMC are independent directors who are not associated with the Sponsor
in any manner. The AMC must have a net worth of at least 10 crores at all
times. They also look after the administrative functions of a mutual fund for
which they charge management fee.
Registrar and Transfer Agent
The AMC if so authorized by the Trust Deed appoints the Registrar and
Transfer Agent to the Mutual Fund. The Registrar processes the application
form, redemption requests and dispatches account statements to the unit
holders.
Custodian
Mutual fund is required by law to protect their portfolio securities by
splacing them with a custodian. Nearly all mutual funds use qualified bank
custodians. Only a registered custodian under the SEBI regulation can act as
a custodian to a mutual fund.A custodian handles the investment back office
of a mutual fund.
Fee structure:-
Custodian charges range between 0.15% to 0.20% on the net value of the
customers holding for custodian services space is one important factor
which has fixed cost element.
RESPONSIBILITY OF CUSTODIANS: -
Receipt and delivery of securities
Holding of securities.
Collecting income
Holding and processing cost
Corporate actions etc
RATE OF RETURN ON MUTUAL FUNDS:-
An investor in mutual fund earns return from two sources:
Income from dividend paid by the mutual fund.
Capital gains arising out of selling the units at a price higher than the
acquisition price.

Formation and regulations:


Mutual funds are to be established in the form of trusts under the
Indian trusts act and are to be operated by separate asset management
companies (AMC s)
AMCs shall have a minimum Net worth of Rs. 5 crores;
AMCs and Trustees of Mutual Funds are to be two separate legal
entities and that an AMC or its affiliate cannot act as a manager in
any other fund;
Mutual funds dealing exclusively with money market instruments are
to be regulated by the Reserve Bank Of India.
Mutual fund dealing primarily in the capital market and also partly
money market
instruments are to be regulated by the Securities Exchange Board Of
India (SEBI)
All schemes floated by Mutual funds are to be registered with SEBI

CHARACTERISTICS:
Professional management
Diversification
Convenient Administration
Return potential
Low cost
Liquidity
Transparency
Flexibility
Choice in scheme selection
Well regulated
Tax benefits
HISTORY OF MUTUAL FUND
The mutual fund industry in India started in 1963 with the formation of Unit
Trust of India, at the initiative of the Government of India and Reserve
Bank. Though the growth was slow, but it accelerated from the year 1987
when non-UTI players entered the Industry .In the past decade, Indian
mutual fund industry had seen a dramatic improvement, both qualities
wise as well as quantity wise. Before, the monopoly of the market had seen
an ending phase; the Assets Under Management (AUM) was Rs67 billion.
The private sector entry to the fund family raised the Aum to Rs. 470 billion
in March 1993 and till April 2004; it reached the height if Rs. 1540 billion.
The Mutual Fund Industry is obviously growing at a tremendous space with
the mutual fund industry can be broadly put into four phases according to
the development of the sector. Each phase is briefly described as under.
The history of mutual funds in India can be broadly divided into four
distinct phases :
First Phase: 1964-1987
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament.
It was set up by the Reserve Bank of India and functioned under the
Regulatory and administrative control of the Reserve Bank of India. In
1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and
administrative control in place of RBI. The first scheme launched by UTI
was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 cores of assets
under management.
Second Phase: 1987-1993 (Entry of Public Sector Funds)
In 1987 marked the entry of non- UTI, public sector mutual funds set up by
public sector banks and Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC). SBI Mutual Fund was the
first non- UTI Mutual Fund established in June1987followed by Canara
bank Mutual Fund (Dec87), Punjab National Bank Mutual Fund (Aug 89),
Indian Bank Mutual Fund (Nov89), Bank of India (Jun 90), Bank of Baroda
Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while
GIC had set up its mutual fund in December 1990. At the end of 1993, the
mutual fund industry had assets under management of Rs.47, 004 cores.

Third Phase: 1993-2003 (Entry of Private Sector Funds)


With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a wider choice of fund
families. Also, 1993 was the year in which the first Mutual Fund Regulations
came into being, under which all mutual funds, except UTI were to be
registered and governed. The erstwhile Kothari Pioneer (now merged with
Franklin Templeton) was the first private sector mutual fund registered
in July 1993. The industry now functions under the SEBI (Mutual
Fund) Regulations1996.As at the end of January 2003; there were 33
mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India
with Rs.44,541 crores of assets under management was way ahead of
other mutual funds.

Fourth Phase Since February 2003


In February 2003, following the repeal of the Unit Trust of India Act 1963
UTI was bifurcated into two separate entities. One is the Specified
Undertaking of the Unit Trust of India with assets under management of
Rs.29, 835 crores as at the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain other schemes. The
second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC.
It is registered with SEBI and functions under the Mutual Fund Regulations.
The graph indicates the growth of assets over the years.

ADVANTAGES OF MUTUAL FUND


Portfolio Diversification
Mutual Funds invest in a well-diversified portfolio of securities which
enables investor to hold a diversified investment portfolio (whether the
amount of investment is big or small).
Professional Management
Fund manager undergoes through various research works and has
better investment management skills which ensure higher returns to
the investor than what he can manage on his own.

Less Risk
Investors acquire a diversified portfolio of securities even with a small
investment in a Mutual Fund. The risk in a diversified portfolio is lesser
than investing in merely 2 or 3 securities.
Low Transaction Costs
Due to the economies of scale (benefits of larger volumes), mutual
funds pay lesser transaction costs. These benefits are passed on to the
investors.

Liquidity
An investor may not be able to sell some of the shares held by him very
easily and quickly, whereas units of a mutual fund are far more liquid.

Choice of Schemes
Mutual fund provide investors with various schemes with different
investment objectives. Investors have the option of investing in a
scheme having a correlation between its investment objectives and
their own financial goals. These schemes further have different
plans/options.

Transparency
Funds provide investors with updated information pertaining to the
markets and the schemes. All material facts are disclosed to investors as
required by the regulator.

Flexibility
Investor also benefit from the convenience and flexibility offered
by Mutual Funds. Investors can switch their holdings from a debt
scheme to an equity scheme and vice-versa. Option of systematic (at
regular intervals) investment and withdrawal is also offered to the
investors in most open-end scheme .

Safety
Mutual Fund industry is part of a well-regulated investment
environment where the interests of the investors are protected by the
regulator. All funds are registered with SEBI and complete transparency
is forced.

DISADVANTAGES OF MUTUAL FUND


Costs Control Not in the Hands of an Investor
Investor has to pay investment management fees and fund
distribution costs as a percentage of the value of his investments (as
long as he holds the units), irrespective of the performance of the fund.
No Customized Portfolios
The portfolio of securities in which a fund invests is a decision taken by
the fund manager. Investors have no right to interfere in the decision
making process of a fund manager, which some investors find as a
constraint in achieving their financial objectives.
Difficulty in Selecting a Suitable Fund Scheme
Many investors find it difficult to select one option from
the plethora of funds / schemes / plans available. For this, they may
have to take advice from financial planners in order to invest in the right
fund to achieve their objectives.
TYPES OF MUTUAL FUNDS
Schemes according to maturity period :
A mutual fund scheme can be classified into open-ended scheme
or close ended scheme depending on its maturity period.

Open ended fund/scheme:


An open-ended fund or scheme is one that is available for subscription
and repurchase on a continuous basis. These schemes not have a fixed
maturity period. Investors can conveniently buy and sell units at Net
Asset Value (NAV) related prices which are on a daily basis. The key
feature of open-end schemes is liquidity.
Close ended Fund/scheme:
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7
years. The fund is open for subscription only during a specified period
at the time of launch of the scheme. Investors can invest in the scheme
at the time of the initial public issue and thereafter they can buy or sell
the units of the scheme on the stock exchanges where the units are
listed. In order to provide an exit route to the investors some close
ended funds give an option of selling back the units to the mutual fund
through periodic repurchase at NAV related prices. SEBI Regulations
stipulate that at least one of the two exit routes is provided to the
investors i.e. either repurchase facility or through listing on stock
exchanges. These mutual funds schemes disclose NAV generally a
weekly basis.

Schemes according to investment objective :


A scheme can also be classified as growth scheme, income
scheme, or balance scheme considering its investment objective. Such
schemes may be open-ended or close-ended scheme as described earlier.
Such schemes may be classified mainly as follows:
Equity funds: These funds invest in equities and equity related
instruments. With fluctuating share prices, such funds show
volatile performance, even losses. However, short term
fluctuations in the market, generally smoothens out in the long term,
thereby offering higher returns at relatively lower volatility. At the
same time, such funds can yield great capital appreciation as,
historically, equities have outperformed all asset classes in the long
term. Hence, investment in equity funds should be considered for a
period of at least 3-5 years. It can be further classified as:

Growth Fund: Aim to provide capital appreciations over the medium


to long term. These schemes normally invest a majority of their funds
in equities and are willing to bear short term decline in value for
possible future appreciation. These schemes are not for investors
seeking regular income or needing their money back in the short term.

Diversified Equity Fund: Diversified equity funds are the


most popular among investors. They invest in many stocks across
many sectors, and because they have the freedom to chop and churn
their portfolios as they like, diversified equity funds are a good proxy
to the stock market. If a general exposure to equities is what you want,
they are a good option. They can invest in all listed stocks, and even
in unlisted stocks. They can invest in which ever sector they like, in
what ever ratio they like.
Equity Linked Savings Schemes (ELSS): Equity linked savings
schemes (ELSS) are diversified equity funds that additionally offer
income tax benefits to individuals. ELSS is one of the many section
80c instruments, along with the more popular debt options like the
PPF, NSC and infrastructure bonds. In this Section 80c grouping.
ELSS is unique. Being the only instrument to offer a total equity
exposure.
Index Fund: An index fund is a diversified equity fund; with a
difference- a fund manager has absolutely no say in stock selection. At
all times, the portfolio of an index fund mirrors an index, both in its
choice of stocks and their percentage holding. As of March 2004,
equity index funds tracked either the Sensex or the Nifty. So, an index
fund that mirrors the Sensex will invest only in the 30 Sensex stocks,
which too in the same proportion as their weight age in the index.
Sector Fund: Sector funds invest in stocks from only one sector, or a
handful of sectors. The objective is to capitalize on the story in the
sectors, and offer investors a window to profit from such
opportunities. Its a very narrow focus, because of which sector funds
are considered the riskiest among all equity funds.
Mid Cap Fund: These are diversified funds that target companies
on the fast growth trajectory. In the long run, share prices are driven
by growth in a companys turnover and profits. Market players refer to
them as mid-sized companies and mid-cap stocks with size in this
context being benchmarked to a companys market value. So, while a
typical large cap stock would have a market capitalization of over
Rs 1,000 crores, a mid-cap stock would have a market value of Rs
250-2,000 crores.
DEBT FUNDS:-These Funds invest a major portion of their
corpus in debt papers. Government authorities, private companies,
banks and financial institutions are some of the major issuers of debt
papers. By investing in debt instruments, these funds ensure low risk and
provide stable income to the investors.
Debt funds are further classified as:
Gilt Funds: Invest their corpus in securities issued by
Government, popularly known as GOI debt papers. These Funds
carry zero Default risk but are associated with Interest Rate risk.
These schemes are safer as they invest in papers backed
by Government.

Income Funds: Income funds aim to maximize debt returns for the
medium to longer term. Invest a major portion into various
debt instruments such as bonds, corporate debentures and
Government securities.

MIPs: Invests around 80% of their total corpus in debt instruments


while the rest of the portion is invested in equities. It gets benefit of
both equity and debt market. These scheme ranks slightly high on the
risk-return matrix when compared with other debt schemes.

Short Term Plans (STPs): Meant for investors with an investment


horizon of 3-6 months. These funds primarily invest in short term
papers like Certificate of Deposits (CDs) and Commercial
Papers (CPs). Some portion of the corpus is also invested in
corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds


are meant to provide easy liquidity and preservation of capital. These
schemes invest in shortterm instruments like Treasury Bills,
inter-bank call money market etc. These funds are meant for
short-term cash management of corporate houses and are
meant for an investment horizon of 1day to 3 months. These
schemes rank low on risk-return matrix and are considered to be the
safest amongst all categories of mutual funds.
Floating Rate Funds: These income funds are more insulated from
interest rate than their conventional peers. In other words, interest rate
changes, which cause the NAV of a conventional debt fund to go up or
down, have little, or no, impact on NAVs of floating rate funds.

HYBRID FUNDS:-
BALANCED FUNDS:-These funds, as the name suggests,
are a mix of both equity and debt funds. The aim of balanced
funds is to provide both growth and regular income as such
schemes invest both in equities and fixed income securities
in the proportion indicated in their offer documents. These
are appropriate for investors looking for moderate growth.
They generally invest 40-60% in equity and debt instruments.
These funds are also affected because of fluctuations in shares prices
in the stock markets. However, NAVs of such funds are likely to be
less volatile compared to pure equity funds. Following are balanced
funds classes:-
Debt-oriented funds -Investment below 65% in equities.
Equity-oriented funds -Invest at least 65% in equities, remaining in
debt.

Growth and Income Fund: Funds that combine features of


growth funds and income funds are known as Growth-and-Income
Funds. These funds invest in companies having potential for
capital appreciation and those known for issuing high dividends.
The level of risks involved in these funds is lower than
growth funds and higher than income funds.

Commodity Funds
Those funds that focus on investing in different commodities (like
metals, food grains, crude oil etc.) or commodity companies or
commodity futures contracts are termed as Commodity Funds. A
commodity fund that invests in a single commodity or a group of
commodities is a specialized commodity fund and a commodity
fund that invests in all available commodities is a diversified
commodity fund and bears less risk than a specialized commodity
fund. "Precious Metals Fund" and Gold Funds (that invest in gold,
gold futures or shares of gold mines) are common examples of
commodity funds.

Real Estate Funds


Funds that invest directly in real estate or lend to real estate
developers or invest in shares/securitized assets of housing finance
companies, are known as Specialized Real Estate Funds. The
objective of these funds may be to generate regular income for
investors or capital appreciation.
Exchange Traded Funds (ETF)
Exchange Traded Funds provide investors with combined benefits of
a closed-end and an open-end mutual fund. Exchange Traded Funds
follow stock market indices and are traded on stock exchanges like a
single stock at index linked prices. The biggest advantage offered
by these funds is that they offer diversification, flexibility of holding a
single share (tradable at index linked prices) at the same time.
Recently introduced in India, these funds are quite popular abroad.

Fund of Funds
Mutual funds that do not invest in financial or physical assets, but do
invest in other mutual fund schemes offered by different AMCs, are
known as Fund of Funds. Fund of Funds maintain a portfolio
comprising of units of other mutual fund schemes, just like
conventional mutual funds maintain a portfolio comprising of
equity/debt/money market instruments or non financial assets.
Fund of Funds provide investors with an added advantage of
diversifying into different mutual fund schemes with even a small
amount of investment, which further helps in diversification of risks.
However, the expenses of Fund of Funds are quite high on account of
compounding expenses of investments into different mutual fund
schemes.
Market potential of mutual funds
Low Penetration of Mutual Funds in INDIA
Few people have been exposed to the idea & advantages of mutual funds and
even fewer actually invest in mutual funds, because of lack of adequate no.
of advisors

Measure US India
Rupees invested in Mutual Funds out of 100 > 30 <2
MF Industry size as % size of economy (GDP) 83% 6%
Total size / value of MF industry (Rs. Lac Crores) > 469 > 3.4

Opportunity to offer such products to clients


Every person can be a customer !!
low Competition of Mutual Fund Advisors
Lack of competition represents a very big opportunity to grow your business
anywhere in India.
> 15 Lacs Insurance Advisors
V/s
< 50,000 Mutual Fund Advisors (Very Few Financial
Advisors)
30 Insurance Advisors V/s 1 Mutual Fund Advisor

WHY INSURANCE AGENTS SHOULD SELL MUTUAL FUND?


Ans:- Following reasons will suffice the purpose of this question
Reason 1: Easy to make more clients
The Penetration of Mutual Funds is very low
whereas relatively,
The Penetration of Insurance is very high .
Opportunity for you to acquire more clients
Now no call of yours should get waste

Reason 2: Less Competition in the market


Nationally there are 15 lakh insurance agents huge competition
even in small villages/towns
Whereas,
There are only 30,000 AMFI certified mutual fund agents all over
India.
A huge DEMAND of Quality Mutual Fund Agents
There is a genuine need for more than 2 lakh mutual fund advisors in
India (our estimates)
Reason 3: More satisfaction to your clients
If you are not selling mutual funds then you must not be aware of
what they truly are and the possibilities that they offer in providing
solutions that meet the diverse needs of different clients.
With mutual funds in your offering, you are in a much better
position to fully meet the clients financial and investment needs.
Your client would ideally like you to do that and will be happy
once to offer him multiple solutions.

Reason 4: Additional source of income


Mutual fund is one product today that potentially has no limits to the
volumes that you can generate.
The important differentiation here with insurance is that you
income is not based on the premium you collect but on the
entire AUM (assets under management) that you have mobilized to
counter the low rates.
An agents AUM running into crores in quite common in the
industry. The income from mutual funds can complement your
earnings from insurance and may even substitute them in future

Reason 5: Leveraging existing clientele base


How to get more out of what you already have?
Well, mutual fund is just the perfect answer to that question.
The truth is that there is a lot of potential to generate further
income from your existing clientele base.
Much of the investment needs of clients are unexplored and
unfulfilled that you can satisfy.
Reason 6: Strong industry growth ahead
There is a very strong growth of mutual funds ahead
The reasons are many good product, low penetration, huge
market, growing income, changing mindset, lack of other attractive
investment products, etc.
In US, almost every third household invests in mutual funds.
The US MF industry size is about 67% of the US GDP and are 1.5
times of the bank deposits in US.
The situation is though almost opposite in India with the MF industry
size here equal to 6% of GDP and bank deposits are 10.50 times of the
total industry size.
.
Reason 7: Retention and loyalty of clients
The underlying logic can be found in the growth of multiplexes,
shopping malls, after all the human nature is basically the same
People today look for easy, fast, and single service point that
provides them with solutions that meets their multiple needs.
your client would probably invest in mutual funds some day or later

Why not You do the same before anyone else gets to your client?

Reason 8: Greater choice of products


Till now we havent really talked about what choices you can offer to
your clients In fact, you can offer cash-flow management, to long-
term goal oriented planning to your clients.
Your basket would include pure equity funds (Diversified / Sectoral /
Index Funds) to pure debt funds (Gilt / Income / Short Term Plans /
Floating / Liquid Funds) to hybrid funds (MIPs / Balance / Arbitrage
Funds) to the tax saving ELSS.
With a vast range of Fund houses and many more schemes the
choices are virtually endless, and one is sure to find what one needs.

Reason 9: Be a Complete Financial Advisor


What next to Insurance?
There is an opportunity for you to transcend to the next level and
offer real solutions that will truly add value to your clients.
You should develop yourself and grow more as a Financial advisor
rather than just Insurance agent.
The learnings can extend beyond products to markets, to
equities, debt, economy, etc to understanding real financial planning,
funds management, etc

Reason 10: Helps in selling ULIPs


If your focus is also selling ULIPS then, dealing in mutual funds
should also help you in better understanding and helping
communicate the same to your clients.
It is a general observation in western countries that as an economy
progresses, term plans and ULIPs have increasing % of fresh
investments from clients as far as insurance is considered.

You presence in mutual funds would be an advantage to you going


forward.

Research design and methods

Research Design
A research design is the arrangement of conditions for collection and
analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure. (CR Kothari, 2009)
Different type of Research designs
Exploratory research
Exploratory research is the type of research in which the research is
conducted for the problem that has not been clearly defined. This type
of study is conducted for formulating a problem for more precise
investigation. As the hypotheses is clearly defined, this method is not
applicable.
Descriptive research
Descriptive research includes surveys and fact finding enquiries of
different kinds. The major purpose of descriptive research is
description of the state of affairs as it exists at present. The main
characteristic of this method is that the researcher has no control over
the variables, he can only report what has happened or what is
happening. (C R Kothari, 2009) As the researchers are convinced that
Alto and Swift are the most selling car models of Maruti and intend to
prove through market survey, this method is applicable.
Data Collection methods
Collection of data is the most prominent part of any survey. As soon as the
research question is created the data collection begins. There are two
methods of collecting data i.e. Primary data and secondary data.
Primary data
The primary data are those which are collected afresh and for the first
time, and thus happen to be original in character. (C. R. Kothari,
2009)
The following are the methods of collecting primary data
Questionnaire Method
A questionnaire consists of a number of questions printed or typed in a
definite order on a form or set of forms.(C.R.Kothari,2009).

Interview Method
The interview method of collecting data involves presentation of oral-
verbal stimuli and reply in terms of oral-verbal responses.
(C.R.Kothari,2009)
The researchers in this project have surveyed through questionnaire
method.
Secondary data
The secondary data, on the other hand, are those which have already
been collected by someone else and which have already been passed
through the statistical process.(C.R.Kothari,2009).
Review literature uses secondary data in this study
Sample design
A sample design is a definite plan for obtaining a sample from a given
population. It refers to the technique or the procedure the researcher would
adopt in selecting items for the sample. (C.R. Kothari, 2009)
Types of Sample design
Non-probability sampling
Non-probability sampling is that sampling procedure which does not afford
any basis for estimating the probability that each item in the population has
of being included in the sample. (C.R. Kothari, 2009)
Types of Non Probability Sampling
Purposive Sampling or Judgemental sampling
Snowball Sampling
Quota Sampling
Dimensional Sampling
Convenient sampling
Accidental, Haphazard or Convenience Sampling
In this type of sampling the sampling units that are convenient to the
researchers are contacted. The researchers have used this type of sampling
method.
.

Data analysis and presentation


Data Analysis
Data Analysis is about summarising the data collected via questionnaires
into a simple format so that the research question can be answered.
An analysis is given below by the researchers on the data obtained during
the questionnaire survey. Each question from the questionnaire is taken and
its responses are carefully tabulated, based on which a graph a prepared,
supported by explanation and analysis for the same.

Data analysis on survey :


Question 1: What products are you dealing in your existing business ?
Table 1:
Life insurance 400
General insurance 350
Postal schemes 20
Others 100

Interpretation:
From the above graph there are 350 life insurance agents who are dealing in
both life insurance and general insurance and there are 20 agents who deals
in postal schemes and the remaining 100 agents are also dealing in
mediclaim policy also.

Question 2: Do you know about the Mutual Fund as a product for


wealth creation of customers?
Table 2:
Yes 250
No 100
Know Slightly 50
Interpretation:
As from the above graph it is clear that out of 400 life insurance agents there
are only 250 life insurance agents who know about mutual fund as a product
for wealth creation of customers where 100 agents dont know about mutual
funds but there are only 50 agents who have only basic knowledge about
mutual funds .

Question 3: Do you know the revenues in mutual fund business for


advisors ?
Table 3:
Yes 100
No 200
Partial knowledge 100

Interpretation:
As from the above graph there are only 100 life insurance agents who know
the revenue in mutual fund where the other 100 agents have partial
knowledge of revenues in mutual fund n the 50% agents dont know the
revenues in mutual fund.

Question 4: Do you know the advantages of adding up mutual fund as a


product along with your existing business ?
Table 4:
Yes 60
No 275
Partial knowledge 65
Interpretation:
Among 400 agents 275 are not interested in taking mutual funds agency, 60
are interested in mutual funds agency & 65 will think of taking mutual fund
agency.

Question 5: Would you like to attend Business Opportunity Program


organized by NJ India ?

Table 5:

Yes 100
No 20
Yes but not now 280
Interpretation:
According to graph only 70 agents are aware of schemes offered by mutual
funds and 50 agents have few knowledge of schemes offered by mutual
funds and remaining 280 agents are not aware

Question 6: Can we send a representative from NJ India Invest for more


information about MF Investments and Business Opportunity in MF ?

Table 6:

Yes 50
No 250
Y.es but with an appointment 50

Interpretation:
There are only 50 agents who want to know about mutual fund investments
and business opportunity in MF and other 50 agents who want to know
about MF but with an appointment and the remaining 250 agents do not
want to know about MF because due to lack of time and because of Diwali
festival season.
Question 7: Have you cleared your AMFI exam ?

Table 7:

Yes 50
No 350

Interpretation:
Among 400 agents, 100 are interested in giving AMFI exam & remaining
are not interested in giving the exam.

Question 8: If no, would you like to give the exam ?

Table 8:

Yes 50
No 350

Interpretation:

From the above graph there are only 50 life insurance agents who want to
give the exam and the remaining agents do not want to give the exam.

SWOT ANALYSIS OF MF
Strength
Large number of potential customers are base.
Government support by way of tax concession for MF investors
volatility of bank interest rate.
Better scope for accessing market information offer scope for
accessing market information offer liquidity to the investors at any
time.
Offers variety of products to the investors.
The size of the market is large.
Weakness
Poor participation of retail investors
Lack of focus
Under performance
Poor service condition
Distribution network is confines only to metro cities

Opportunity
Huge untapped market in semi-urban and rural areas.
High level of savings habit among the people
Liberalized business environment
Using on-line node of trading systems
Investment opportunities abound in the international market
Failures of non bank financial company operations.
Threats
Increasing competition among the players
High level of volatility in the stock market
Possibility of more stringent regulation by SEBI , RBI , AMFI,etc ., in
future
CONCLUSION
While meeting life insurance agents I found that most of the people are not
aware of mutual fund as a product. They just heard the name of mutual fund
but they dont know the advantages or revenue/commissions of mutual fund.
SIP plan is like their ULIP plans. I asked them, were they interested in
having additional source of income they replied Yes. They were very few
agents who want to know about mutual fund. People show their curiosity to
know about mutual fund through Business opportunity programme which
has been conducted at NJ India Invest pvt. Ltd. But later I found that only
few attended the BOP and when I called those who didnt attended the BOP
they replied that they dont have time some said they just want to attached
with LIC product or insurance product because mutual fund is not safe.
Recommendations

There should be add campaign so that we can create the awareness among
insurance advisors. Due to lack of awareness people have misconception
about mutual fund. Many Advisors were totally unaware about the company
because lack of promotional activities being organized by NJ India Invest
Pvt. Ltd.
QUESTIONNAIRE
Q1. What products are you dealing in your existing business?

Life insurance ( ) 2. General insurance ( ) 3. Postal Schemes ( ) 4.


Others-----------------

Q2. Do you know about Mutual Fund as a product for wealth creation of customers?

Yes ( ) 2. No ( ) 3. Know slightly ( )

Q3. Do you know the revenue in mutual fund business for advisors?

Yes ( ) 2. No ( ) 3. Would like to know ( )


Q4. Do you know the advantages of adding up Mutual Fund as a product along with your
existing Business ?

Yes ( ) 2. No ( ) 3. Would like to know ( )

Q5. Would you like to attend Business Opportunity Program organized by NJ India ?

Yes ( ) 2. No ( ) 3. Yes but not now ( )

Q6. Can we send a representative from NJ India Invest for more information about MF
investments and Business Opportunity in MF?

Yes ( ) 2. No ( ) 3. Yes but with an appointment ( )

Q7. Have you cleared your AMFI exam?

Yes ( ) 2. No ( )

Q8. If no, would you like to give the exam?

Yes ( ) 2. No ( )
Bibliography
www.njindiainvest.com
www.moneycontrol.com
www.njfundz.com
www.amfiindia.com
http://www.managementparadise.com
Amfi Course Book
NSIM Mutual Fund Books